ST. PAUL, Minnesota — Senate Majority Leader Tom Bakk says he's reluctant to use Minnesota's projected $1.87 billion surplus entirely because of a tax lawsuit that would be costly if the state loses.

Bakk wouldn't say Monday how large of a cushion his Democratic caucus would try to set aside, but said it is essential to prepare for the potential $700 million exposure.

The lawsuit filed by the Texas-based Kimberly-Clark Corp. is headed for trial this month. It deals with how multistate corporations calculate tax liability in Minnesota. Possible appeals could push a final resolution into next year.

Bakk says Senate Democrats will offer preliminary details about their budget proposal later this week. If some surplus money goes to tax cuts, Bakk says he prefers it be property tax relief.